Velocity (or speed) is the measurement of how fast a space craft is going.
It is designated by the the letter v. The HUD shows the spacecraft's speed aspect of velocity as a bar in the right side of the screen. The spacecraft's speed is highlighted within the colored ranges as it moves faster or slower. The different colors correspond to different ways the craft interacts with planets and other objects.
All spacecraft that are within a circle of influence will start to fall towards the planet. It is its velocity that determines whether it crashes into the planet, orbits it safely, or leaves orbit at greater than escape velocity.
A secondary component associated with Velocity is Direction, which is detailed below.
The orange range represents sub-orbital velocity, that is, velocity that is less than sufficient to maintain a stable orbit.
Landing spacecraft safely is done within the orange zone. The orange zone is divided by a single tic mark, which represents 1 NaviComp unit/s.
The green range represents orbital velocity. The spacecraft within this range will orbit the planet, increasing their velocity as the bar approaches the red range. The green zone is divided by 2 tic marks.
The red range is separated into two parts. The lower range is the velocity that spacecraft achieves when it escapes a circle of influence of a planet. The upper range appears when the spacecraft exceeds 6 NaviComp units per second. The entire range shifts and the top of the scale is approximately 25 NaviComp units a second.
The second aspect of Velocity is Direction.
A spacecraft may be facing "forward" but drifting "sideways" (or "backwards"). Learning to quickly ascertain and manipulate your spacecraft's movement is imperative.
Typically, there are two directional indicators (two lines) depicted on the HUD: a red line and a green line. A stationary spacecraft only shows one directional indictor, the green line.
Direction of ORIENTATION is indicated by the HUD's green line. It shows which way the spacecraft is oriented (facing or pointing).
Direction of MOVEMENT is represented by the red line, which indicates which direction the spacecraft is actually moving.
A comprehensive, techno-jargon laced, yet informative source about space flight, velocity and other orbital mechanics can be downloaded here.